10-Q 1 d29483.htm 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

___________________________________

FORM 10-Q




x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012




o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-33718

________________________

BIOHEART, INC.
(Exact name of registrant as specified in its charter)

________________________




Florida		65-0945967
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

13794 NW 4^th Street, Suite 212, Sunrise, Florida 33325
(Address of principal executive offices) (Zip Code)

(954) 835-1500
(Registrant’s telephone number, including area code)

______________

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value per share

(Title of Class)

______________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.045 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of August 1, 2012, there were 151,375,798 outstanding shares of the registrant’s common stock, par value $0.001 per share.

BIOHEART, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q FILING

JUNE 30, 2012

TABLE OF CONTENTS



PART I		Financial Information	Page Number

	Item 1.	Financial Statements (unaudited)	3

		Condensed Consolidated Balance Sheets – June 30, 2012 (Unaudited) and December 31, 2011	4

		Unaudited Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2012, June 30, 2011 and the period from August 12, 1999 (date of inception) to June 30, 2012	5

		Unaudited Condensed Consolidated Statements of Stockholders Deficit –Six Months Ended June 30, 2012	6

		Unaudited Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2012, June 30, 2011 and the period from August 12, 1999 (date of inception) to June 30, 2012	7

		Notes to Unaudited Condensed Consolidated Financial Statements	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

	Item 4.	Controls and Procedures	35

PART II		Other Information	36

	Item 1.	Legal Proceedings	36

	Item 1A.	Risk Factors	36

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

	Item 3.	Defaults Upon Senior Securities	37

	Item 4.	Mine Safety Disclosures	37

	Item 5.	Other Information	37

	Item 6.	Exhibits	38

SIGNATURES			43

EX-31.1			44

EX-32.1			45

PART I – FINANCIAL INFORMATION

Item 1. Interim Financial Statements and Notes to Interim Financial Statements

General

The accompanying interim financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2011. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that can be expected for the year ending December 31, 2012.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,			December 31,
		2012			2011
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	35,175		$	36,828
Accounts receivable, net		304			3,495
Inventory		63,285			63,702
Prepaid and other		56,104			49,828
Total current assets		154,868			153,853

Property and equipment, net		8,216			15,476

Other assets		54,662			99,164

Total assets	$	217,746		$	268,493

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	2,575,450		$	2,377,807
Accrued expenses		4,286,898			3,882,115
Advances, related party		567,000			456,000
Deposits		465,286			465,286
Notes payable, related party		1,865,000			1,865,000
Notes payable, net of debt discount		3,012,177			3,232,762
Total current liabilities		12,771,811			12,278,970

Derivative liability		70,221			—

Stockholders' deficit:
Preferred stock, par value $0.001; 5,000,000 shares authorized, none issued and outstanding as of June 30, 2012 and December 31, 2011		—			—
Common stock, par value $0.001; 195,000,000 shares authorized, 136,975,326 and 95,625,236 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively		136,975			95,625
Common stock subscription		261,300			—
Additional paid in capital		99,705,873			98,915,155
Deficit accumulated during development stage		(112,728,434	)		(111,021,257	)
Total stockholders' deficit		(12,624,286	)		(12,010,477	)

Total liabilities and stockholders' deficit	$	217,746		$	268,493

See the accompanying notes to these condensed consolidated financial statements

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


													From August 12,
													1999 (date of
	Three months ended June 30,						Six months ended June 30,						Inception) to
	2012			2011			2012			2011			June 30, 2012
					(restated)						(restated)
Revenue	$	2,688		$	3,495		$	43,173		$	3,495		$	1,251,704
Cost of sales		—			139			417			139			551,251
Gross profit		2,688			3,356			42,756			3,356			700,453

Operating expenses:
Research and development		93,917			107,569			190,646			277,680			64,481,757
Marketing, general and administrative		325,239			556,506			893,338			1,047,014			35,552,822
Impairment of investment		—			—			—			—			58,695
Depreciation and amortization		3,868			10,280			8,193			18,985			891,518
Total operating expenses		523,024			674,355			1,092,177			1,343,679			100,984,792

Net loss from operations		(520,336	)		(670,999	)		(1,049,421	)		(1,340,323	)		(100,284,339	)

Other income (expenses):
Development revenues		—			—			—			—			117,500
Gain on change of fair value of derivative liability		6,461			92,001			6,461			92,001			(18,565	)
Interest income		—			—			—			—			762,277
Other income		6,062			475			17,415			3,864			270,246
Interest expense		(252,472	)		(492,480	)		(681,632	)		(902,200	)		(13,575,553	)
Total other income (expenses)		(239,949	)		(400,004	)		(657,756	)		(806,335	)		(12,444,095	)

Net loss before income taxes		(760,285	)		(1,071,003	)		(1,707,177	)		(2,146,658	)		(112,728,434	)

Income taxes (benefit)		—			—			—			—			—

NET LOSS	$	(760,285	)	$	(1,071,003	)	$	(1,707,177	)	$	(2,146,658	)	$	(112,728,434	)

Net loss per common share, basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.01	)	$	(0.05	)

Weighted average number of common shares outstanding, basic and diluted		133,150,267			43,208,580			125,623,320			41,868,749

See the accompanying notes to these condensed consolidated financial statements

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
SIX MONTHS ENDED JUNE 30, 2012
(unaudited)

	Preferred stock			Common stock					Additional Paid in		Deferred		Common Stock Subscription		Deficit Accumulated During Development			Total
Balance, December 31, 2011	—	$	—		95,625,236	$	95,625	$	98,915,155	$	—	$	—	$	(111,021,257	)	$	(12,010,477	)
Issuance of common stock	—		—		9,321,430		9,321		158,179		—		—		—			167,500
Common stock issued for services	—		—		250,000		250		9,750		—		—		—			10,000
Common stock issued under put agreement	—		—		1,000,000		1,000		24,000		—		—		—			25,000
Common stock issued upon conversion of notes payable	—		—		30,778,660		30,779		392,653									423,432
Stock based compensation	—		—		—		—		35,611		—		—		—			35,611
Beneficial conversion feature connection with issuance of convertible note	—		—		—		—		170,525		—		—		—			170,525
Common stock subscription	—		—		—		—		—		—		261,300		—			261,300
Net loss	—		—		—		—		—		—		—		(1,707,177	)		(1,707,177	)
Balance, June 30, 2012	—	$	—		136,975,326	$	136,975	$	99,705,873	$	—	$	261,300	$	(112,728,434	)	$	(12,624,286	)

See the accompanying notes to these condensed consolidated financial statements;

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

							From August 12,
							1999 (date of
	Six months ended June 30,						Inception) to
	2012			2011			June 30, 2012
					(restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,707,177	)	$	(2,146,658	)	$	(112,728,434	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		8,193			18,985			891,518
Bad debt expense		—			1,266			166,266
Discount on convertible debt		304,586			224,080			1,447,573
Gain on change in fair value of derivative liability		(6,461	)		(92,001	)		18,565
Non cash payment of interest		36,251			158,441			214,152
Amortization of warrants issued in exchange for licenses and intellectual property		—			—			5,413,156
Amortization of warrants issued in connection with notes payable		95,291			159,372			5,437,604
Amortization of loan costs		927			6,099			1,228,717
Warrants issued in exchange for services		—			53,200			285,659
Equity instruments issued in connection with R&D agreement		—			—			360,032
Equity instruments issued in connection with settlement agreement		—			—			3,381,629
Common stock issued in connection with accounts payable		—			—			756,816
Common stock issued in exchange for services		10,000			60,000			1,457,922
Common stock issued in connection with amounts due to guarantors of Bank of America loan		—			—			69,159
Common stock issued in exchange for distribution rights and intellectual property		—			—			99,997
Warrants issued in connection with accounts payable					—			7,758
Stock based compensation		35,611			180,429			9,909,939
(Increase) decrease in:
Receivables		3,191			—			(1,569	)
Inventory		44,919			354			(18,784	)
Prepaid and other current assets		(6,276	)		(21,284	)		(66,073	)
Other assets		—			—			(28,854	)
Increase (decrease) in:
Accounts payable		222,642			369,714			3,158,057
Accrued expenses		404,783			323,851			5,651,586
Deferred revenue		—			—			465,287
Net cash used in operating activities		(553,520	)		(704,152	)		(72,422,322	)

See the accompanying notes to these unaudited condensed consolidated financial statements

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

							From August 12,
							1999 (date of
	Six months ended June 30,						Inception) to
	2012			2011			June 30, 2012
					(restated)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment		(933	)		—			(899,733	)
Net cash used by investing activities		(933	)		—			(899,733	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net		378,800			678,300			63,675,775
Proceeds from (payments for) initial public offering of common stock, net		—			—			1,447,829
Proceeds from subordinated related party note		—			—			3,000,000
Payment of note payable		—			—			(3,000,000	)
Proceeds from notes payable, related party		—			140,000			505,000
Proceeds from related party advances		111,000			148,000			567,000
Proceeds from exercise of stock options		—			737			293,749
Proceeds from notes payable		63,000			59,750			11,620,750
Repayments of notes payable		—			(291,748	)		(3,533,605	)
Payment of loan costs		—			—			(1,219,268	)
Net cash provided in financing activities		552,800			735,039			73,357,230

Net (decrease) increase in cash and cash equivalents		(1,653	)		30,887			35,175

Cash and cash equivalents, beginning of period		36,828			3,298			—
Cash and cash equivalents, end of period	$	35,175		$	34,185		$	35,175

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	265,747		$	129,554		$	2,046,211
Income taxes paid	$	—		$	—		$	—

Non cash financing activities:
Common stock issued in settlement of notes payable	$	423,432		$	345,746		$	3,956,177

See the accompanying notes to these unaudited condensed consolidated financial statements

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the presentation of the accompanying unaudited condensed consolidated financial statements follows:

General

The accompanying unaudited condensed consolidated financial statements of Bioheart, Inc., (the “Company”), have been prepared in accordance with the rules and regulations (S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results from operations for the six month period ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ended December 31, 2012. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated December 31, 2011 financial statements and footnotes thereto included in the Company’s SEC Form 10-K.

Basis and business presentation

Bioheart, Inc (the “Company”) was incorporated under the laws of the State of Florida in August 1999. The Company is in the development stage, as defined by Accounting Standards Codification subtopic 915-10, Development Stage Entities (“ASC 915-10”) and is the cardiovascular sector of the cell technology industry delivering cell therapies and biologics that help address congestive heart failure, lower limb ischemia, chronic heart ischemia, acute myocardial infarctions and other issues. To date, the Company has not generated significant sales revenues, has incurred expenses, and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise. For the period from inception through June 30, 2012, the Company has accumulated a deficit through its development stage of $112,728,434.

The unaudited condensed consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Comprehensive Income

The Company does not have any items of comprehensive income in any of the periods presented.

Net Loss per Common Share, basic and diluted

The Company has adopted Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants have been excluded as common stock equivalents in the diluted loss per share because their effect is anti-dilutive on the computation. Fully diluted shares outstanding were 151,384,090 and 43,471,738 for the three months ended June 30, 2012 and 2011, respectively and 143,857,143 and 45,861,767 for the six months ended June 30, 2012 and 2011, respectively.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

Stock based compensation

The Company follows Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”) which requires that all share-based payments to both employees and non employees be recognized in the income statement based on their fair values. (See note 10)

As of June 30, 2012, there were outstanding stock options to purchase 4,611,450 shares of common stock, 3,064,435 shares of which were vested.

Concentrations of Credit Risk

The Company’s financial instrument that is exposed to a concentration of credit risk is cash and accounts receivable. Effective December 31, 2010 and extending through December 31, 2012, all non-interest-bearing transaction accounts are fully insured by the Federal Deposit Insurance Corporation (FDIC), regardless of the balance of the account. Generally, the Company’s cash and cash equivalents in interest-bearing accounts does not exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management.

As of June 30, 2012 and December 31, 2011, one (1) and three (3) customers represented 100% and 98% of the Company’s accounts receivable, respectively.

For the three and six month periods ended June 30, 2012, the Company's revenues earned from the sale of products and services were $2,688 and $43,173, from one (1) customer.. For the three and six month period ended June 30, 2012 and June 30 2011, the Company’s revenues earned from the sale of products and services were $43,173 and $3,495 from one (1) customer, respectively.

Reliance on Key Personnel and Consultants

The Company has 5 full-time employees and one part-time employee. The Company is heavily dependent on the continued active participation of these current executive officers, employees and key consultants. The loss of any of the senior management or key consultants could significantly and negatively impact the business until adequate replacements can be identified and put in place.

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $93,917 and $107,569 for the three months ended June 30, 2012 and 2011, respectively; $190,646 and $277,680 for the six month ended June 30, 2012 and 2011, respectively; and $64,481,757 from August 12, 1999 (date of inception) to June 30, 2012.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

Fair Value

Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

The company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. Neither of these statements had an impact on the Company’s financial position, results of operations nor cash flows.

Reclassification

Certain reclassifications have been made to prior periods’ data to conform with the current year’s presentation. These reclassifications had no effect on reported income or losses.

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s unaudited condensed consolidated financial position, results of operations or cash flows.

NOTE 2 – RESTATEMENT

The accompanying unaudited condensed consolidated Statement of Operations for the three and months ended June 30, 2011 have been restated to correct the errors in the accounting of the Company's issuances of notes payable during the six months ended June 30, 2011. These changes correct the treatment recording of issued notes payable in exchange for payment of debt obligations.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

Unaudited Condensed Consolidated Statement of Operations
For the Three Months Ended June 30, 2011


	As previously reported		Adjustment	Reference	As restated

Revenue	$ 3,495		$ -		$ 3,495
Cost of sales	139		-		139
Gross profit	3,356				3,356

Operating expenses:
Research and development	107,569		-		107,569
Marketing, general and administrative	556,506		-		556,506
Depreciation and amortization	10,280		-		10,280
Total operating expenses	674,355		-		674,355

Net loss from operations	(670,999	)	-		(670,999)

Other income (expenses):
Gain on derivative liability	92,001		-		92,001
Other income	475		-		475
Loss on settlement of debt	(250,644	)	250,644	(1)	-
Interest expense	(492,480	)	-		(492,480)
Total other income (expenses)	(650,648	)	250,644		(400,004)

Net loss before income taxes	(1,321,647	)	250,644		(1,075,655)

Income taxes (benefit)	-		-		-

NET LOSS	$ (1,321,647	)	$ 250,644		$ (1,075,655)

(1) reverse recording of loss on assignment of debt

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

Unaudited Condensed Consolidated Statement of Operations
For the Six Months Ended June 30, 2011

	As previously reported		Adjustment	Reference	As restated

Revenue	$ 3,495		$ -		$ 3,495
Cost of sales	139		-		139
Gross profit	3,356				3,356

Operating expenses:
Research and development	277,680		-		277,680
Marketing, general and administrative	1,047,014		-		1,047,014
Depreciation and amortization	18,985		-		18,985
Total operating expenses	1,343,679		-		1,343,679

Net loss from operations	(1,340,323	)	-		(1,340,323)

Other income (expenses):
Gain on derivative liability	92,001		-		92,001
Other income	3,864		-		3,864
Loss on settlement of debt	(361,516	)	361,516	(1)	-
Interest expense	(902,200	)	-		(902,200)
Total other income (expenses)	(1,167,851	)	361,516		(806,335)

Net loss before income taxes	(2,508,174	)	361,516		(2,146,658)

Income taxes (benefit)	-		-		-

NET LOSS	$ (2,508,174	)	$ 361,516		$ (2,146,658)

(1) reverse recording of loss on assignment of debt

NOTE 3 – GOING CONCERN MATTERS

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed consolidated financial statements, during six months ended June 30, 2012, the Company incurred net losses attributable to common shareholders of $1,707,177 and used $553,520 in cash for operating activities. As of June 30, 2012 we had a working capital deficit of approximately $12.7 million. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

The Company’s existence is dependent upon management’s ability to develop profitable operations and to obtain additional funding sources. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

NOTE 4 – INVENTORY

Inventory consists of raw materials. Costs of raw materials are determined using the FIFO method. Inventory is stated at the lower of costs or market (estimated net realizable value).

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment as of June 30, 2012 and December 31, 2011 is summarized as follows:

	June 30, 2012			December 31, 2011
Laboratory and medical equipment	$	352,358		$	352,358
Furniture, fixtures and equipment		130,916			130,916
Computer equipment		54,414			53,481
Leasehold improvements		362,046			362,046
		899,734			898,801
Less accumulated depreciation and amortization		(891,518	)		(883,325	)
	$	8,216		$	15,476

Property and equipment are recorded on the basis of cost. For financial statement purposes, property, plant and equipment are depreciated using the straight-line method over their estimated useful lives.

Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment.

NOTE 6 – ACCRUED EXPENSES

Accrued expenses consisted of the following as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
License and royalty fees	$	1,681,333	$	1,540,204
Amounts payable to the Guarantors of the Company’s loan agreement with Bank of America and Seaside Bank, including fees and interest		1,223,782		1,164,306
Interest payable on notes payable		882,208		732,556
Vendor accruals and other		109,132		115,312
Employee commissions, compensation, etc		317,630		329,737
Advances from directors/shareholders		72,813		-
	$	4,286,898	$	3,882,115

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

NOTE 7 – STANDBY EQUITY DISTRIBUTION AGREEMENT

On November 2, 2011, the Company and Greystone Capital Partners (“Greystone”) entered into a Standby Equity Distribution Agreement (the “Agreement”). Pursuant to the Agreement, Greystone has agreed to provide the Company with up to $1,000,000 of funding for the 24-month period following the date a registration statement of the Company’s common stock is declared effective by the SEC (the “Equity Line”). During this 24-month period, commencing on the date on which the SEC first declares effective our registration statement, the Company may request a draw down under the Equity Line by which the Company would sell shares of its common stock to Greystone, which is obligated to purchase the shares under the Agreement. For each share of our common stock purchased under the Agreement, Greystone will pay eighty percent (80%) of the average of the lowest daily volume weighted average price for five consecutive trading days immediately preceding Advance Notice (the "Valuation Period") commencing the date a Advance Notice (the "Advance Notice") is delivered to Greystone in a manner provided by the Agreement. Subject to certain limitations and floor price reductions, the Company may, at its sole discretion, issue a Put Notice to Greystone and Greystone will then be irrevocably bound to acquire such shares. The registration statement relating to the requested bond of the Company's common stock pursuant to the Agreement was declared effective on February 10, 2012.

During the three and six months ended June 30, 2012, the Company “put” 1,000,000 shares of common stock for a total of $25,000.

NOTE 8 – NOTES PAYABLE

Notes payable were comprised of the following as of June 30, 2012 and December 31, 2011:


Seaside Bank note payable.	$	980,000	$	980,000
Northstar, formerly BlueCrest Capital Finance note payable. Monthly payments of principal and interest as described below, net of unamortized debt discount of $-0- and $96,218 respectively		544,267		807,827
Rogers Telecomm note payable		1,000,000		1,000,000
Hunton & Williams notes payable		384,972		384,972
Greystone notes payable		139,729		241,508
Asher notes payable		63,000
Total notes payable		3,111,968		3,232,762
Less unamortized debt discount		(99,791)
Total notes payable net of unamortized debt discount		3,012,177
Less current portion		(3,012,177)		(3,232,762)
Notes payable – long term	$	—	$	-

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

Seaside Bank

On October 25, 2010, the Company entered into a Loan Agreement with Seaside National Bank and Trust for a $980,000 loan at 4.25% per annum interest that was used to refinance the Company’s loan with Bank of America. The obligation is guaranteed by shareholders of the Company.

In connection with the Loan Agreement with Seaside Bank and Trust Company, the Company made and delivered a promissory note in the principal amount of the loan that matures in two years. In connection with the loan transaction with Seaside Bank and Trust Company, the Company entered into an Amended and Restated Loan and Security Agreement with BlueCrest Venture Finance Master Fund Limited.

Northstar (formerly BlueCrest Capital Finance) Note Payable

On June 1, 2007, the Company closed on a $5.0 million senior loan from BlueCrest Capital Finance, L.P. with a term of 36 months which bears interest at an annual rate of 12.85% (the “BlueCrest Loan”). The first three months required payment of interest only with equal principal and interest payments over the remaining 33 months. As consideration for the loan, the Company issued to BlueCrest Capital Finance, L.P. a warrant to purchase 65,030 shares of common stock at an exercise price of $7.69 per share. The warrant, which became exercisable one year following the date the warrant was issued, has a ten year term. This warrant had a fair value of $455,483, which was accounted for as additional paid in capital and reflected as a component of debt discount and was being amortized as interest expense ratably over the term of the loan. On August 31, 2007, BlueCrest Capital Finance, L.P. assigned its rights, liabilities, duties and obligations under the BlueCrest Loan and warrant to BlueCrest Venture Finance Master Fund Limited (“BlueCrest”).

The loan may be prepaid in whole but not in part. As collateral to secure its repayment obligations under the loan, the Company granted BlueCrest a first priority security interest in all of the Company’s assets, excluding intellectual property but including the proceeds from any sale of any of the Company’s intellectual property. The loan has certain restrictive terms and covenants including among others, restrictions on the Company’s ability to incur additional senior or pari-passu indebtedness or make interest or principal payments on other subordinate loans.

In the event of an uncured event of default under the loan, all amounts owed to BlueCrest are immediately due and payable and BlueCrest has the right to enforce its security interest in the assets securing the loan. During the continuance of an event of default, all outstanding amounts under the loan will bear interest (payable on demand) at an annual rate of the 14.85%. In addition, any unpaid amounts are subject, until paid, to a service charge in an amount equal to two percent (2%) of the unpaid amount. Events of default include, among others, the Company’s failure to timely make payments of principal when due, the Company’s uncured failure to timely pay any other amounts owing to BlueCrest under the loan, the Company’s material breach of the representations and warranties contained in the loan agreement and the Company’s default in the payment of any debt to any of its other lenders in excess of $100,000 or any other default or breach under any agreement relating to such debt, which gives the holders of such debt the right to accelerate the debt.

On January 2, 2009, the Company failed to make the monthly payment of principal and interest of approximately $181,000 due on such date. On January 28, 2009, the Company received from BlueCrest notice of this event of default (the “Default Notice”) under the BlueCrest Loan. By reason of the stated event, BlueCrest demanded payment of a 2% late fee of approximately $3,600, together with the principal and interest payment of approximately $181,000. On February 2, 2009, the Company received from BlueCrest notice of acceleration of the outstanding principal amount of the BlueCrest Loan and demanded repayment in full of all outstanding principal and accrued interest on the loan, including late fees, in the aggregate amount of $2,947,045. (The acceleration notice, together with the Default Notice, are referred to as the “Notices”).

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

The Company and BlueCrest entered into an amendment to the BlueCrest Loan as of April 2, 2009 (the “ BlueCrest Loan Amendment”), that, among other things, includes BlueCrest’s agreement to forbear from exercising any of its rights or remedies regarding the defaults described in Notices (the “Forbearance”) as long as there are no new defaults under the BlueCrest Loan, as amended.The BlueCrest Loan Amendment, (a) increases the amount of permitted unsecured indebtedness of the Company, (b) amended the amortization schedule for the Loan to provide for interest-only payments until July 1, 2009, at which time monthly principal and interest payments of $262,692 will commence, and (c) prohibits the Company from granting any lien against its intellectual property and grants to BlueCrest a lien against the Company’s intellectual property that will become effective in the event of a default. In addition, the Company issued BlueCrest a warrant to purchase 1,315,542 shares of the Company’s common stock at $0.53 per share. The fair value of the issued warrants of $539,676 was determined using the Black Scholes Option Pricing Model and was recorded as a debt discount and amortized ratably over the remaining term of the loan.

Effective July 1, 2009, the Company and BlueCrest agreed to enter into an amendment to the BlueCrest Loan to amend the amortization schedule for the Loan to provide for interest-only payments until January 1, 2010, at which time monthly principal and interest payments of $139,728 were to commence. In connection with that Amendment the Company issued BlueCrest a warrant to purchase $600,000 of the Company’s common shares and paid a fee of $29,435. The fair value of the issued warrants of $575,529 was determined using the Black Scholes Option Pricing Model and was recorded as a debt discount and amortized ratably over the term of the loan.

Effective December 31, 2009, the Company and BlueCrest entered into an amendment to the BlueCrest Loan to amend the amortization schedule for the Loan to provide for interest-only payments until July 1, 2010, at which time monthly principal and interest payments of $139,728.82 were to commence. In connection with that Amendment, the Company issued BlueCrest a warrant to purchase $600,000 of the Company’s common shares and paid a fee of $20,000. The Company also provided BlueCrest with a lien on its Intellectual Property. The fair value of the issued warrants of $507,606 was determined using the Black Scholes Option Pricing Model and was recorded as a debt discount and amortized ratably over the term of the loan.

The outstanding principal amount of the Loan as of December 31, 2010 was $2,276,543. On January 7, 2011, BlueCrest agreed with the Company and Magna Group, LLC (“Magna”) to split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,729, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The Company exchanged the BlueCrest note for a convertible note with Magna in consideration for a payment by Magna to BlueCrest of $139,729. Additionally, Magna purchased a $25,000 convertible note from the Company (the “Convertible Note”). On July 18, 2011, the Company issued 625,000 shares of its common stock in settlement of the convertible note and related accrued interest.

On May 16, 2011, BlueCrest agreed with the Company and Magna Group, LLC (“Magna”) to again split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,729, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Magna in consideration for a payment by them to BlueCrest of $139,729, and thereafter exchanged for a new Convertible Note. Additionally, Magna purchased a $34,750 convertible note from the Company (the “Convertible Note”). In June and July of 2011 the Company issued 3,431,233 shares of common stock in connection with the conversion of the notes

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

On June 15, 2011, BlueCrest agreed with the Company and Lotus Funding Group, LLC (“Lotus”) to split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,729, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Lotus in consideration for a payment by them to BlueCrest of $139,729, and thereafter exchanged for a new Convertible Note. In June and July of 2011 the Company issued an aggregate of 3,4313233 shares of common stock in connection with the conversion of these notes.

On July 8, 2011, BlueCrest agreed with the Company and Greystone Capital (“Greystone”) to split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $140,380, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Greystone in consideration for a payment by them to BlueCrest of $140,380, and thereafter exchanged for a new Convertible Note. In July 2011, the Company issued an aggregate of 3,829,001 shares of our common stock in connection with the conversion of the $140,380.21 convertible note.

On August 1, 2011, BlueCrest agreed with the Company and Greystone Capital (“Greystone”) to again split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,728, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Greystone in consideration for a payment by them to BlueCrest of $139,728, and thereafter exchanged for a new Convertible Note. In August 2011, the Company issued an aggregate of 3,358,866 shares of our common stock in connection with the conversion of the $139,728.82 convertible note.

On September 1, 2011, BlueCrest agreed with the Company and Greystone Capital (“Greystone”) to again split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,728, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Greystone in consideration for a payment by them to BlueCrest of $139,728, and thereafter exchanged for a new Convertible Note. In September 2011, the Company issued an aggregate of 5,769,150 shares of our common stock in connection with the conversion of the $139,728.82 convertible note.

On October 1, 2011, BlueCrest agreed with the Company and Greystone Capital (“Greystone”) to again split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,728, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Greystone in consideration for a payment by them to BlueCrest of $139,728, and thereafter exchanged for a new Convertible Note.

The loan evidenced by the New Note is in the nature of convertible debt evidenced by an unsecured convertible promissory note, bearing interest at the rate of 8% per annum, payable at maturity and convertible into common stock of the Company at a price that is 65% of the average of the closing prices for the Company’s shares for the ten (10) days prior to the Lenders’ election to exercise its conversion right.

•	In October and November of 2011, we issued an aggregate of 5,499,487 shares of our common stock in connection with the conversion of the $127,144 convertible note.

•	In January 2012, we issued an aggregate of 937,242 shares of our common stock in connection with the conversion of $12,575 convertible note.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

On November 1, 2011, BlueCrest agreed with the Company and Greystone Capital (“Greystone”) to again split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,728, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Greystone in consideration for a payment by them to BlueCrest of $139,728, and thereafter exchanged for a new Convertible Note.

•	In January and February of 2012, we issued an aggregate of 10,161,166 shares of our common stock in connection with the conversion of the $139,724 convertible note.

On December 1, 2011, BlueCrest agreed with the Company and Greystone Capital (“Greystone”) to again split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,728.82, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Greystone in consideration for a payment by them to BlueCrest of $139,728.82, and thereafter exchanged for a new Convertible Note. In February and March of 2012, we issued an aggregate of 9,838,710 shares of our common stock in connection with the conversion of the $139,728 convertible note.

On January 3, 2012, BlueCrest agreed with the Company and Greystone Capital (“Greystone”) to again split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,728, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Greystone in consideration for a payment by them to BlueCrest of $139,728, and thereafter exchanged for a new Convertible Note.

On February 6, 2012, BlueCrest agreed with the Company and Greg Knutson to again split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $95,000.00, the amount of the monthly payment due on the BlueCrest loan (the “New Note”) after combined with payment of $50,000 by a common stock subscription. The New Note was assigned to Greystone in consideration for a payment by them to BlueCrest of $95,000.00, and thereafter exchanged for a new Convertible Note.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

On March 30, 2012, Bioheart, Inc. (the “Company”) and Northstar Biotechnology Group, LLC (“Northstar”), the holder by assignment of the Amended and Restated Promissory Note (Term A), dated February 6, 2012, issued by the Company to Blue Crest Venture Finance Master Fund Limited, in the principle amount of $544,267.19 (the “Note”), agreed to extend until May 1, 2012 the initial payment date for any and all required monthly under the Note, such that the first of the four monthly payments required under the Note will be due and payable on May, 2012 and all subsequent payments will be due on a monthly basis thereafter commencing on June 1, 2012, and to waive any and all defaults and/or events of default under the Note with respect to such payments. The Company understands that Northstar is owned in part by certain directors and existing shareholders of the Company, including Dr. William P. Murphy Jr., Dr. Samuel Ahn and Charles Hart, and received an assignment of the Note from BlueCrest Master Fund Limited on February 29, 2012. The Company and Northstar are in discussions regarding certain additional amendments to the terms of the Note. As of June 30, 2012, the Company was in default, however, subsequent to June 30, 2012, the Company renegotiated the terms of the note, Northstar has agreed to suspend the requirement of principal payments by Bioheart and allow payment of interest-only in restricted stock.

For the six months ended June 30, 2012 the Company paid $263,560 in principal and $11,641 in interest. As of June 30, 2012 the balance due Northstar under the Loan is $572,303.84..

Rogers Telecom Note

On August 20, 2008, the Company borrowed $1.0 million from a third party pursuant to the terms of an unsecured Promissory Note and Agreement. Outstanding principal and interest on the loan, which accrues at the rate of 13.5% per annum, is payable in one balloon payment upon the Company’s repayment of the BlueCrest Loan, which is scheduled to mature in May 2010, however the Company is not obligated to make payments until BlueCrest Loan is paid off. In the event the Company completes a private placement of its common stock and/or securities exercisable for or convertible into its common stock which generates at least $19.0 million of gross proceeds, the Company may prepay, without penalty, all outstanding principal and interest due under the loan using the same type of securities issued in the subject private placement. Because repayment of the loan could occur within 12 months from the date of the balance sheet, the Company has classified this loan as short term. Subject to certain conditions, at the end of each calendar quarter during the time the loan is outstanding, the Company may, but is not required to, pay all or any portion of the interest accrued but unpaid as of such date with shares of its common stock. In April 2009, as consideration for the authorization to amend certain documents related to the Note, the Company issued to the Noteholder a warrant to purchase 451,053 shares of common stock at an exercise price of $0.5321 per share.

The warrant, which became exercisable immediately upon issuance, has a ten year term. This warrant had a fair value of $195,694, which was accounted for as additional paid in capital and reflected as a component of debt discount and is being amortized as interest expense ratably over the term of the loan.

Hunton & Williams Notes

At December 31, 2011 and December 31, 2010, the Company has two other outstanding notes payable with interest at 8% per annum due at maturity. The two notes, $61,150 and $323,822 are payable in one balloon payment upon the date the Noteholder provides written demand, however the Company is not obligated to make payments until the Northstar Loan is paid off.

Greystone Notes

On January 3, 2012, the Company issued a $139,729 Unsecured Convertible Note that matures in January 3, 2013 in exchange for Bluecrest Capital Finance note payable. Note bears interest at a rate of 8% per annum and is convertible into shares of the Company’s common stock, at a conversion rate of 65% of the average of the three lowest closing prices for the common stock during the ten trading day period prior to date of conversion, but in no event lower than $0.01 per share.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

In accordance with ASC 470-20, the Company recognized an embedded beneficial conversion feature present in Convertible Note. The Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital and a discount against the Convertible Note. The total debt discount attributed to the beneficial conversion feature and common stock issued in the amount of $112,063 is charged operations ratably over the note term as interest expense. For the six months ended June 30, 2012, the Company amortized $54,957 to current period operations as interest expense.

On February 6, 2012, the Company issued a $95,000 Unsecured Convertible Note that matures in February 6, 2013 in exchange for Bluecrest Capital Finance note payable. Note bears interest at a rate of 8% per annum and is convertible into shares of the Company’s common stock, at a conversion rate of 65% of the average of the three lowest closing prices for the common stock during the ten trading day period prior to date of conversion, but in no event lower than $0.01 per share. In accordance with ASC 470-20, the Company recognized an embedded beneficial conversion feature present in Convertible Note. The Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital and a discount against the Convertible Note. The total debt discount attributed to the beneficial conversion feature and common stock issued in the amount of $58,462 is charged operations ratably over the note term as interest expense. On February 21, 2012, the Company issued 6,785,714 shares of common stock in settlement of the Unsecured Convertible Note. For the six months ended June 30, 2012, the Company amortized $58,462 to current period operations as interest expense.

On September 28, 2011, the Company issued a $35,000 Unsecured Convertible Note that matures in September 2012. Note bears interest at a rate of 8% per annum and is convertible into shares of the Company’s common stock, at a conversion rate of the lower of $0.13 per share or 65% of the three lowest closing prices for the common stock during the ten trading day period prior to date of conversion, minimum conversion rate of $0.01 per share. In accordance with ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the New Note. The Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital and a discount against the New Note. The total debt discount attributed to the beneficial conversion feature and common stock issued in the amount of $15,342 is charged to operations ratably over the note term as interest expense. For the six months ended June 30, 2012, the Company amortized and wrote off $11,391 to current period operations as interest expense. During the six months ended June 30, 2012, the Company issued 3,055,828 shares of its common stock in settlement of the September 28, 2011 Unsecured Convertible Note and related accrued interest.

Asher Note

On April 2, 2012, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $63,000 (the "Note").

The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid on January 3, 2013. The Note is convertible into common stock, at Asher’s option, at a 42% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. The Company has identified the embedded derivatives related to the Asher Note. These embedded derivatives included certain conversion features and reset provision. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Note and to fair value as of each subsequent reporting date. At the inception of the Asher Note, the Company determined the aggregate fair value of $76,682 of the embedded derivatives. The fair value of the embedded derivatives was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 222.81%, (3) weighted average risk-free interest rate of 0.18%, (4) expected life of 0.76 year, and (5) estimated fair value of the Company’s common stock of $0.0373 per share. The initial fair value of the embedded debt derivative of $76,682 was allocated as a debt discount up to the proceeds of the note ($63,000) with the remainder ($13,682) charged to current period operations as interest expense. For the six months ended June 30, 2012, the Company amortized $20,315 of debt discount to current period operations as interest expense.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

NOTE 9 – NOTES PAYABLE, RELATED PARTY

As of June 30, 2012 and December 31, 2011, the Company officers and directors have provided notes in aggregate of $1,500,000. The notes are at 8% per annum and are due upon payoff of the BlueCrest note payable described above.

At June 30, 2012 and December 31, 2011, the Company has outstanding notes payable to officers and directors with interest at 8% per annum due at maturity. The three subordinated notes, $125,000, $100,000 and $140,000 were previously due on October 22, 2012, November 30, 2012 and June 4, 2011 respectively, and are unsecured. The company is not obligated to make payment until BlueCrest loan is paid off.

NOTE 10 – DERIVATIVE LIABILITIES

During 2012, the Company issued a $63,000 Convertible Promissory Note to Asher Enterprises, Inc. (“Asher Note”) that mature January 3, 2013. The Asher Notes bear interest at a rate of 8% per annum and can be convertible into the Company’s common shares, at the holder’s option, at the conversion rates of 42% discount to the market price of the lowest three trading prices of the Company’s common shares during the ten-day period ending one trading day prior to the date of the conversion.

The Company has identified the embedded derivatives related to the Asher Notes. These embedded derivatives included certain conversion features and reset provision. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Notes and to fair value as of each subsequent reporting date.

At June 30, 2012, the Company marked to market the fair value of the debt derivatives and determined a fair value of $70,221. The Company recorded a gain from change in fair value of debt derivatives of $6,461. The fair value of the embedded derivatives was determined using Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 154.76%, (3) weighted average risk-free interest rate of 0.16%, (4) expected life of 0.51 year, and (5) estimated fair value of the Company’s common stock of $0.029 per share.

NOTE 11 – STOCKHOLDERS’ EQUITY

Common stock

During the six months ended June 30, 2012, the Company issued an aggregate of 9,321,430 shares of common stock and warrants for the purchase of our common stock, for aggregate gross proceeds of $167,500.

During the six months ended June 30, 2012, the Company issued an aggregate of 250,000 shares of common stock for services rendered valued at $10,000.

During the six months ended June 30, 2012, the Company issued an aggregate of 30,778,660 shares of common stock in settlement of $423,432 of outstanding convertible notes and accrued interest (see Note 8).

During the six months ended June 30, 2012, the Company issued 1,000,000 shares of its common stock in exchange for $25,000 proceeds from equity line (see note 7).

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

NOTE 12 – STOCK OPTIONS AND WARRANTS

Stock Options

In December 1999, our Board of Directors and shareholders adopted our 1999 Officers and Employees Stock Option Plan, or the Employee Plan, and the 1999 Directors and Consultants Stock Option Plan, or the Director Plan. The Employee Plan and the Director Plan are collectively referred to herein as the Plans. The Plans are administered by the Board of Directors and the Compensation Committee. The objectives of the Plans include attracting and retaining key personnel by encouraging stock ownership in the Company by such persons. In February 2010, the Directors & Consultants Plan was amended to extend the termination date of the Plan to December 1, 2011.

As of June 30, 2012, the Company does not have a stock option plan.

A summary of options at June 30, 2012 and activity during the year then ended is presented below:


	Shares	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term (in years)
Options outstanding at January 1, 2011	2,158,447	$ 2.79	6.8
Granted	4,620,092	$ 0.057
Exercised	(1,982,995)	$ 0.001
Forfeited/Expired	(159,226)	$ 1.80
Options outstanding at December 31, 2011	4,636,318	$ 1.20	8.1
Granted	-
Exercised
Forfeited/Expired	(24,868)		5.67
Options outstanding at June 30, 2012	4,611,450	$ 1.18	7.9
Options exercisable at June 30, 2012	3,064,435	$ 1.67	7.4
Available for grant at June 30, 2012	0

The following information applies to options outstanding and exercisable at June 30, 2012:


	Options Outstanding						Options Exercisable
	Shares		Weighted- Average Remaining Contractual Term		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
$0.00 – $0.70		3,494,360		8.9	$	0.19		1,978,894	$	0.20
$0.71 – $1.28		324,780		5.8	$	0.77		301,922	$	0.77
$5.25 – $5.67		746,251		3.0	$	5.58		737,251	$	5.58
$7.69		39,572		4.2	$	7.69		39,572	$	7.69
$8.47		6,796		4.8	$	8.47		6,796	$	8.47
		4,611,450		7.7	$	1.20		3,064,435	$	1.67

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

The fair value of all options vesting during the six months ended June 30, 2012 and 2011 of $35,611 and $180,429, respectively, was charged to current period operations.

Warrants

A summary of warrants at June 30, 2012 and activity during the year then ended is presented below:


	Shares			Weighted- Average Exercise Price			Weighted- Average Remaining Contractual Term (in years)
Outstanding at January 1, 2011		13,920,729			$	1.98		5.8
Issued		20,817,034			$	0.07
Exercised		—			$	0.00
Forfeited		(2,127,688	)		$	0.69
Outstanding at December 31, 2011		32,610,075			$	0.86		3.8
Issued		9,321,430			$	0.018		2.9
Exercised		—			$
Forfeited/Expired		(322,080	)		$			0.76
Outstanding at June 30, 2012		41,609,425			$	0.67		3.6
Exercisable at June 30, 2012		30,743,545			$	0.52		3.5

The following information applies to warrants outstanding and exercisable at June 30, 2012:

	Warrants Outstanding				Warrants Exercisable
	Shares	Weighted- Average Remaining Contractual Term		Weighted- Average Exercise Price	Shares	Weighted- Average Exercise Price
0.01 – $0.50	32,548,150	2.4	$	0.07	23,226,720	$ 0.09
0.52 – $0.68	3,590,090	5.3	$	0.59	3,590,090	$ 0.59
0.70 – $1.62	2,514,193	2.9	$	0.78	2,514,193	$ 0.78
1.81 – $2.61	33,710	0.2	$	1.90	33,710	$ 1.90
3.60 – $4.93	105,000	1.2	$	4.87	105,000	$ 4.87
5.67 – $7.69	2,818,282	10.0	$	7.50	1,273,832	$ 7.26
	41,609,425	3.2	$	0.67	30,743,545	$ 0.52

During the six months ended June 30, 2012, in connection with the sale of common stock, the Company issued an aggregate of 9,321,430 warrants to purchase the Company's common stock at an exercise prices from $0.014 to $0.03 per shares exercisble in six months and expiring three years from issuance.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

NOTE 12 – RELATED PARTY TRANSACTIONS

Lease Guarantee

The Company’s former Chairman of the Board, Chief Executive Officer and Chief Technology Officer has personally guaranteed the Company’s obligations under its lease for its facilities in Sunrise, Florida and has provided a personal guarantee for the Company credit card, which is for his own use only.

Sister-in-Law of former Chairman of the Board

The former sister-in-law of the Company’s former Chairman was an employee and officer of the Company until March, 2012. The amount paid to this individual as salary and bonus for the six months ended June 30, 2012, in 2011, 2010, 2009, 2008, 2007 and for the period from August 12, 1999 (date of inception) to June 30, 2012 was $42,934 $108,892, $106,000, $77,165, $86,209, $87,664 and $580,314, respectively.

Northstar Biotechnology Group, LLC Promissory Note

On March 30, 2012, Bioheart, Inc. (the “Company”) and Northstar Biotechnology Group, LLC (“Northstar”), the holder by assignment of the Amended and Restated Promissory Note (Term A), dated February 6, 2012, issued by the Company to Blue Crest Venture Finance Master Fund Limited, in the principle amount of $544,267.19 (the “Note”), agreed to extend until May 1, 2012 the initial payment date for any and all required monthly under the Note, such that the first of the four monthly payments required under the Note will be due and payable on May, 2012 and all subsequent payments will be due on a monthly basis thereafter commencing on June 1, 2012, and to waive any and all defaults and/or events of default under the Note with respect to such payments. The Company understands that Northstar is owned in part by certain directors and existing shareholders of the Company, including Dr. William P. Murphy Jr., Dr. Samuel Ahn and Charles Hart, and received an assignment of the Note from BlueCrest Master Fund Limited on February 29, 2012. The Company and Northstar are in discussions regarding certain additional amendments to the terms of the Note. As of June 30, 2012, the Company was in default, however, subsequent to June 30, 2012, the Company renegotiated the terms of our note, Northstar has agreed to suspend the requirement of principal payments by Bioheart and allow payment of interest-only in restricted stock.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Royalty Payments

The Company is obligated to pay royalties on commercial sales of certain products that may be developed and sold under various licenses and agreements that have been obtained by the Company.

The Company has entered into various licensing agreements, which include the potential for royalty payments, as follows:

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

William Beaumont Hospital

In June 2000, the Company entered into an exclusive license agreement to use certain patents for the life of the patents in future projects. The patents expire in 2015. In addition to a payment of $55,000 the Company made to acquire the license, the Company is required to pay an annual license fee of $10,000 and royalties ranging from 2% to 4% of net sales of products that are covered by the patents. In order to maintain the exclusive license rights, the agreement also calls for a minimum annual royalty threshold. The minimum royalty threshold was $200,000 for 2011 and $200,000 for 2010. This minimum royalty threshold will remain $210,000 for 2012 and thereafter. As of June 30, 2012, the Company has not made any payments other than the initial payment to acquire the license. At June 30, 2012 and December 31, 2011, the Company’s liability under this agreement was $1,681,333 and $1,540,204, respectively, which is reflected as a component of accrued expenses on the consolidated balance sheets (see Note 6). During the six months ended June 30, 2012 and 2011, the Company incurred expenses of $105,000, $105,000, and $1,681,333 from August 12, 1999 (date of inception) to June 30, 2012. The Company has accrued interest for the past due commitment at 2% over the prime rate per the terms of the agreement. The Company has included $276,633 in accrued expenses as of June 30, 2012.

Approximate annual future minimum obligations under this agreement as of June 30, 2012 are as follows:

Year Ending December 31,


2012	$	105,000
2013		210,000
2014		210,000
2015		210,000
Total	$	735,000

Contingency for Registration of the Company’s common stock

The Company believes that it may have issued options to purchase common stock to certain of its employees, directors and consultants in California in violation of the registration or qualification provisions of applicable California securities laws. As a result, the Company intends to make a rescission offer to these persons. The Company will make this offer to all persons who have a continuing right to rescission, which it believes to include two persons. In the rescission offer, in accordance with California law, the Company will offer to repurchase all unexercised options issued to these persons at 77% of the option exercise price multiplied by the number of option shares, plus interest at the rate of 7% from the date the options were granted. Based upon the number of options that were subject to rescission as of December 31, 2009, assuming that all such options are tendered in the rescission offer, the Company estimated that its total rescission liability would be up to approximately $371,000. However, as the Company believes there is only a remote likelihood the rescission offer will be accepted by any of these persons in an amount that would result in a material expenditure by the Company, no liability was recorded as of June 30, 2012 or December 31, 2011.

Litigation

The Company is subject to other legal proceedings that arise in the ordinary course of business. In the opinion of management, as of June 30, 2012, the amount of ultimate liability with respect to such matters, if any, in excess of applicable insurance coverage, is not likely to have a material impact on the Company’s business, financial position, consolidated results of operations or liquidity. However, as the outcome of litigation and other claims is difficult to predict significant changes in the estimated exposures could exist.

BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2012

NOTE 14 — FAIR VALUE

The carrying value of cash, accounts payable and accrued expenses approximate estimated fair values because of short maturities.

The carrying value of the debt derivative liability is determined using the Binomial Lattice model or Black Scholes option pricing model as described in Note 10. Certain assumptions used in the calculation of the debt derivative liability represent level-3 unobservable inputs.

NOTE 15 – SUBSEQUENT EVENTS

In July 2012 we issued an aggregate of 3,716,667 shares of our common stock and warrants for the purchase of our common stock at an exercise price of $0.02, for aggregate gross proceeds of $77,000.

In July 2012, the company issued an aggregate of 1,500,000 shares of our common stock in connection with the conversion of $15,000 of the convertible note issued to Greystone Capital Partners on January 3, 2012.

On August 1, 2012, Mike Tomas, President and Chief Executive Officer of Bioheart transmitted the following letter to our company shareholders:

Dear Shareholders,

Over the past several months, I have been in active negotiations with several groups interested in helping us restart our FDA-approved clinical trials. Today, I am very pleased to announce that Bioheart, Inc. has received a non-binding term sheet and investment offer from Grupo Vitalmex in Mexico, a global leader in the healthcare sector in Latin America and Europe. ( www.vitalmex.com.mx). Vitalmex’s operations include marketing and distributing specialized healthcare products, devices and therapies worldwide. Established in 1976, Vitalmex has stated that they have vast experience in clinical and hospital infrastructure services such as operating rooms, specialty services, imaging and the manufacturing of high-tech medical equipment in the cardiac and hemodialysis fields. In Mexico alone, they serve a network of 300 public hospitals that provide services to 55 million lives where the number one killer is heart failure. Vitalmex, views Bioheart's cardiac regenerative medicine therapies as a viable solution to this and other patient bases.

The Vitalmex investment in the amount of $2 million, will also enable Bioheart to reinitiate its clinical trials of MyoCell®, MyoCell® SDF-1, LipiCell™ and MyoCath® at the Vitalmex labs and other US trial sites and thus putting us well on our way towards FDA-approval and commercialization of these products. The Bioheart cell therapy products, in our opinion, address an unmet need in the cardiac market by providing true regenerative medicine where the MyoCell product line may regenerate muscle in areas of scar tissue and the LipiCellproduct may help reduce inflammation and promote the growth of new blood vessels. In addition to the many clinical sites in the US including Columbia University, Minneapolis Heart, Cleveland Clinic, Mt Sinai, University of Miami, and more, Bioheart intends to initiate clinical sites in top centers in Mexico. By working with leading interventional cardiologists throughout the world, we believe our Company can quickly bring these therapies to patients by establishing the safety and efficacy data required for FDA approval. The collaboration will also enable Vitalmex to market and distribute Bioheart’s technology in Mexico, Latin America, the Caribbean and potentially other countries that may include Spain, Russia, Germany, Hungary, the Czech Republic and Bulgaria.

In as much as this provides additional capital for the Company for our clinical trials, it also affirms our strong belief in the long term viability and commercialization of our technology, identifies new markets worldwide and allows us to take the Company to the next level in a relatively short period of time.

As if that was not enough good news, at the same time we have renegotiated the terms of our Company note in the amount of $572,000 with NorthStar Biotech, LLC, a consortium of Bioheart Directors and Shareholders, led by Bioheart Director Chuck Hart. You may recall that this consortium was formed by major shareholders and insiders to purchase and protect all of Biohearts' senior debt that was collateralized with our intellectual property and technology. As a further gesture of support for Bioheart and to conserve the Company’s cash, NorthStar has agreed to suspend the requirement of principal payments by Bioheart and to allow payment of interest-only in restricted stock.

The specifics of this term sheet and the note renegotiation will be voted on by the Board of Directors on Monday, August 6th, 2012. Although there can be no assurances of the consummation of the transactions, I trust our new partners and our board of directors will agree the time has come for Bioheart to meet its unrealized value and move to save the lives of millions of patients in heart failure worldwide.

On August 6, 2012, it was determined that NorthStar Biotechnology Group, LLC (“Northstar”), the holder by assignment of the Amended and Restated Promissory Note (Term A), dated February 6, 2012, issued by the Company to Blue Crest Venture Finance Master Fund Limited, in the principle amount of $544,267.19 (the “Note”),would indefinitely suspend principal payments and Bioheart would only pay interest payments on the current note in preferred shares. In addition, Bioheart agreed to payment of yearly valuation of collateral (also in shares), add intellectual property to collateral, transfer rights to old clinical data and existing approved trials, transfer IP and knowhow for preparing Myoblasts and transfer of clinical trial protocols. Also, NorthStar will be provided with an exclusive worldwide licensing and distribution (sub licensing) agreement and a right to purchase additional shares in Bioheart at a fixed price of $.02/share with 100% warrant coverage. In return, NorthStar will pay Bioheart an 8% gross royalty on the licensing, with a sliding scale to be negotiated between NorthStar and Bioheart.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless otherwise indicated, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” are to the Company and all subsidiaries, unless the context requires otherwise.. The following discussion and analysis by our management of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated interim financial statements and the accompanying related notes included in this quarterly report and our audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission.

Cautionary Statement Regarding Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, and we intend that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Any such forward-looking statements would be contained principally in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Additional information concerning these and other risks and uncertainties is contained in our filings with the Securities and Exchange Commission, including the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011.

Our Ability To Continue as a Going Concern

Our independent registered public accounting firm has issued its report dated April 12, 2012, in connection with the audit of our consolidated financial statements as of December 31, 2011, that included an explanatory paragraph describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial statements as of June 30, 2012 have been prepared under the assumption that we will continue as a going concern. Specifically, note 3 of our unaudited financial statement for the quarter ended June 30, 2012 addresses the issue of our ability to continue as a going concern. If we are not able to continue as a going concern, it is likely that holders of our common stock will lose all of their investment. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Overview

We are committed to maintaining our leading position within the cardiovascular sector of the cell technology industry delivering cell therapies and biologics that help address congestive heart failure, lower limb ischemia, chronic heart ischemia, acute myocardial infarctions and other issues. Our goals are to regenerate damaged tissue, if possible, improve a patient’s quality of life, reduce hospitalizations and reduce overall health care costs.

We were incorporated in the state of Florida in August 1999. Our principal executive offices are located at 13794 NW 4th Street, Suite 212, Sunrise, Florida 33325 and our telephone number is (954) 835-1500. Information about us is available on our corporate web site at www.bioheartinc.com. Information contained on the web site does not constitute part of, and is not incorporated by reference in, this report.

Biotechnology Product Candidates

Specific to biotechnology, we are focused on the discovery, development and, subject to regulatory approval, commercialization of autologous cell therapies for the treatment of chronic and acute heart damage and peripheral vascular disease. MyoCell is a clinical muscle-derived cell therapy designed to populate regions of scar tissue within a patient’s heart with new living cells for the purpose of improving cardiac function in chronic heart failure patients. Our most recent clinical trials of MyoCell include the SEISMIC Trial, a completed 40-patient, randomized, multicenter, controlled, Phase II-a study conducted in Europe and the MYOHEART Trial, a completed 20-patient, multicenter, Phase I dose-escalation trial conducted in the United States. We were approved by the U.S. Food and Drug Administration (the “FDA”) to proceed with a 330-patient, multicenter Phase II/III trial of MyoCell in North America and Europe (the “MARVEL Trial”). We completed the MyoCell implantation procedure on the first patient in the MARVEL Trial on October 24, 2007. Thus far, 20 patients, including 6 control patients, have been treated. Initial results for the 20 patients were released at the Heart Failure Society of American meeting in September, 2009, showing a significant (35%) improvement in the 6 minute walk for those patients who were treated, and no improvement for those who received a placebo. We are planning, on the basis of these results, to request the FDA to consider the MARVEL Trial a pivotal trial (pivotal from Phase II to Phase III) and to reduce the number of patients in the trial to 150. No assurances can be provided that this request will be approved. The SEISMIC, MYOHEART and MARVEL Trials have been designed to test the safety and efficacy of MyoCell in treating patients with severe, chronic damage to the heart. Upon regulatory approval of MyoCell, we intend to generate revenue in the United States from the sale of MyoCell cell-culturing services for treatment of patients by qualified physicians. Abroad, we are identifying centers where it is already acceptable to use the Myocell treatment so that greater numbers of patients with this problem can have access to treatment.

We received approval from the FDA in July of 2009 to conduct a Phase I safety study on 15 patients of a combined therapy (Myocell with SDF-1), which we believe is the first approval of a study combining gene and cell therapies. We initially commenced work on this study, called the REGEN trial, during the first quarter of 2010. We suspended activity on the trial in 2010 while seeking additional funding necessary to conduct the trial. Work on the trial was reinitiated in 2011. Based on the results of the trial, we intend to either incorporate the combined treatment into the Marvel Trial, or continue with the Marvel Trial based on the use of Myocell alone.

In our pipeline, we have multiple product candidates for the treatment of heart damage, including autologous, adipose cell treatment for acute heart damage, chronic ischemia and critical limb ischemia. We hope to demonstrate that our various product candidates are safe and effective complements to existing therapies for chronic and acute heart damage as well as peripheral arterial disease.

MyoCell

MyoCell is a clinical therapy intended to improve cardiac function for those with congestive heart failure and is designed to be utilized months or even years after a patient has suffered severe heart damage due to a heart attack or other cause. We believe that MyoCell has the potential to become a leading treatment for severe, chronic damage to the heart due to its perceived ability to satisfy, at least in part, what we believe to be an unmet demand for more effective and/or more affordable therapies for chronic heart damage. MyoCell uses myoblasts, cells that are precursors to muscle cells, from the patient’s own body. The myoblasts are removed from a patient’s thigh muscle, isolated, grown through our proprietary cell culturing process, and injected directly in the scar tissue of a patient’s heart. A qualified physician performs this minimally invasive procedure using an endoventricular catheter. We entered into an agreement with a Johnson & Johnson company to use its NOGA® Cardiac Navigation System along with its MyoStar™ injection catheter for the delivery of MyoCell in the MARVEL Trial.

When injected into scar tissue within the heart wall, myoblasts have been shown to be capable of engrafting in the damaged tissue and differentiating into mature skeletal muscle cells. In a number of clinical and animal studies, the engrafted skeletal muscle cells have been shown to express various proteins that are important components of contractile function. By using myoblasts obtained from a patient’s own body, we believe MyoCell is able to avoid certain challenges currently faced by other types of cell-based clinical therapies including tissue rejection and instances of the cells differentiating into cells other than muscle. Although a number of therapies have proven to improve the cardiac function of a damaged heart, no currently available treatment, to our knowledge, has demonstrated an ability to generate new muscle tissue within the scarred regions of a heart.

We believe the market for treating patients in NYHA Class II or NYHA Class III heart failure is significant. According to the AHA Statistics and the European Society of Cardiology Task Force for the Treatment of Chronic Heart Failure, in the United States and Europe there are approximately 5.2 million and 9.6 million, respectively, patients with heart failure. The AHA Statistics further indicate that, after heart failure is diagnosed, the one-year mortality rate is high, with one in five dying and that 80% of men and 70% of women under age 65 who have heart failure will die within eight years. We believe that approximately 60% of heart failure patients are in either NYHA Class II or NYHA Class III heart failure based upon a 1999 study entitled “Congestive Heart Failure Due to Diastolic or Systolic Dysfunction – Frequency and Patient Characteristics in an Ambulatory Setting” by Diller, PM, et. al.

MyoCath

The MyoCath was developed by Bioheart co-founder Robert Lashinski specifically for delivering new cells to damaged tissue. It is a deflecting tip needle injection catheter that has a larger needle which is 25 gauge for better flow rates and less leakage than systems that are 27 gauge. This larger needle allows for thicker compositions to be injected which helps with cell retention in the heart. Also, the MyoCath needle has more fluoroscopic brightness than the normally used nitinol needle, enabling superior visualization during the procedure. Seeing the needle well during injections enables the physician who is operating the catheter to pinpoint targeted areas more precisely, thus improving safety. The MyoCath competes well with other biological delivery systems on price and efficiency and allows the physician to utilize standard fluoroscopy and echo equipment found in every cath lab. The MyoCath is used to inject cells into cardiac tissue in therapeutic procedures to treat chronic heart ischemic and congestive heart failure. Inventory of MyoCath is limited as it is not currently in production. Our management are considering several contract manufacturers to produce additional inventory.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our critical accounting policies are described in Note 1 to our consolidated financial statements appearing elsewhere in this report, we believe the following policies are important to understanding and evaluating our reported financial results:

Stock-Based Compensation

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

At the time of each transaction, management assesses whether the fee associated with the transaction is fixed or determinable and whether or not collection is reasonably assured. The assessment of whether the fee is fixed or determinable is based upon the payment terms of the transaction. If a significant portion of a fee is due after our normal payment terms or upon implementation or client acceptance, the fee is accounted for as not being fixed or determinable and revenue is recognized as the fees become due or after implementation or client acceptance has occurred. Collectability is assessed based on a number of factors, including past transaction history with the client and the creditworthiness of the client.

We account for Multiple-Element Arrangements under ASC 605-10 which incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arrangements (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets.

Unbilled revenue is revenue that is recognized but is not currently billable to the customer pursuant to contractual terms. In general, such amounts become billable in accordance with predetermined payment schedules, but recognized as revenue as services are performed. Amounts included in unbilled revenue are expected to be collected within one year and are included within current assets.

Research and Development Activities

We account for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred

Derivative financial instruments

Accounting Standards Codification subtopic 815-40, Derivatives and Hedging, Contracts in Entity’s own Equity (“ASC 815-40”) became effective for the Company on October 1, 2009. The Company has identified the embedded derivatives related to the our issued Asher Notes. These embedded derivatives included certain conversion features and reset provision. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Notes and to fair value as of each subsequent reporting date.

Results of Operations

We are a development stage company and our MyoCell product candidate has not received regulatory approval or generated any material revenues and is not expected for a year or two, if ever. We have generated substantial net losses and negative cash flow from operations since inception and anticipate incurring significant net losses and negative cash flows from operations for the foreseeable future as we continue clinical trials, undertake new clinical trials, apply for regulatory approvals, make capital expenditures, add information systems and personnel, make payments pursuant to our license agreements upon our achievement of certain milestones, continue development of additional product candidates using our technology, establish sales and marketing capabilities and incur the additional cost of operating as a public company.

Comparison of the Three Months Ended June 30, 2012 and 2011

Revenues

We recognized revenues of $2,688 in the three month period ended June 30, 2012 compared to revenues of $3,495 in the three month period ended June 30, 2011. The revenue in the three month period ended June 30, 2012 was generated from laboratory services .

Cost of Sales

Cost of sales was $0 in the three month period ended June 30, 2012 compared to $139 in the three month period ended June 30, 2011.

Research and Development

Research and development expenses were $93,917 in the three month period ended in June 30, 2012, a decrease of $13,652 from research and development expenses of $107,569 in the three month period ended in June 30, 2011. The decrease was primarily attributable to a decease in the amount of funds allocated to our clinical trials.

The timing and amount of our planned research and development expenditures is dependent on our ability to obtain additional financing. See “- Existing Capital Resources and Future Capital Requirements” and Item 1A. “Risk Factors - We will need to secure additional financing …” as filed with our Form 10-K with the Securities and Exchange Commission on April 12, 2012.

Marketing, General and Administrative

Marketing, general and administrative expenses were approximately $325,000 in the three month period ended June 30, 2012, a decrease of $232,000 from marketing, general and administrative expenses of approximately $557,000 in the three month period ended in June 30, 2011. The decrease in marketing, general and administrative expenses is attributable, in part, to reduction in the value of stock based compensation issued to officers, directors and key employees.

Interest Expense

Interest expense was $252,472 in the three month period ended June 30, 2012 compared to interest expense of $492,480 in the three month period ended in June 30, 2011, a decrease of $240,008. During the three months ended June 30, 2012, we incurred a non cash interest expense of $115,421 from the write off and amortization of debt discounts associated with our issued convertible notes as compared to $316,456 for the same period last year.

Comparison of the Six Months Ended June 30, 2012 and 2011

Revenues

We recognized revenues of $43,173 in the six month period ended June 30, 2012 compared to revenues of $3,495 in the six month period ended June 30, 2011. The revenue in the three month period ended June 30, 2012 was generated from laboratory services.

Cost of Sales

Cost of sales was $417 in the six month period ended June 30, 2012 compared to $139 in the six month period ended June 30, 2011.

Research and Development

Research and development expenses were $190,646 in the six month period ended in June 30, 2012, a decrease of $87,034 from research and development expenses of $277,680 in the six month period ended in June 30, 2011. The decrease was primarily attributable to a decrease in the amount of funds allocated to our clinical trials.

Marketing, General and Administrative

Marketing, general and administrative expenses were approximately $893,000 in the six month period ended June 30, 2012, a decrease of $154,000 from marketing, general and administrative expenses of approximately $1,047,000 in the six month period ended in June 30, 2011. The decrease in marketing, general and administrative expenses is attributable, in part, to reduction in the value of stock based compensation issued to officers, directors and key employees along with headcount reductions.

Interest Expense

Interest expense was $681,632 in the six month period ended June 30, 2012 compared to interest expense of $902,200 in the six month period ended in June 30, 2011, a decrease of $220,568. During the six months ended June 30, 2012, we incurred a non cash interest expense of 415,886 from the write off and amortization of debt discounts associated with our issued convertible notes as compared to $411,669 for the same period last year.

Inflation

Our opinion is that inflation has not had, and is not expected to have, a material effect on our operations.

Climate Change

Our opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations.

Concentrations of Credit Risk

As of June 30, 2012 and December 31, 2011, one (1) and three (3) customers represented 100% and 98% of the Company’s accounts receivable, respectively.

Liquidity and Capital Resources

In the six month period ended June 30, 2012, we continued to finance our considerable operational cash needs with cash generated from financing activities.

Operating Activities

Net cash used in operating activities was $553,520 in the six month period ended June 30, 2012 as compared to $704,152 of cash used in the six month period ended in June 30, 2011.

Our use of cash for operations in the six months ended June 30, 2012 reflected a net loss generated during the period of approximately $1.7 million, adjusted for non-cash items such as stock-based compensation of $35,611, amortization of the fair value of warrants granted in connection with the Note payable of $95,291, amortization of debt discounts incurred in connection with the BlueCrest Loan and Bank of America and other Loans of $304,586, non cash interest paid of $36,251 and depreciation of $8,193. In addtion we had a net decrease in operating assets of $41,834 and an increase in accrued expenses of $404,783 and accounts payable of $222,642.

Our use of cash for operations in the six months ended June 30, 2011 reflected a net loss generated during the period of $2.1 million, adjusted for non-cash items such as stock-based compensation of $180,429 amortization of the fair value of warrants granted in connection with the BlueCrest Loan and Bank of America loan of $159,372, amortization of loan costs incurred in connection with the BlueCrest Loan and Bank of America Loan and other loans of $224,080 and depreciation of $18,985 and an increase in prepaid and other current assets of $21,284. Partially offsetting these uses of cash were increases in accrued expenses of $323,851 and accounts payable of $369,714.

Investing Activities

Net cash used in investing activities was $933 in the six month period ended June 30, 2012 from acquisition of equipment as compared $0 for the same period last year.

Financing Activities

Net cash provided by financing activities was an aggregate of $552,800 in the six month period ended June 30, 2012 as compared to $735,039 in the six month period ended in June 30, 2011.In the six month period ended June 30, 2012 we sold, in private placements, shares of common stock and warrants for aggregate net cash proceeds of $378,800.

Existing Capital Resources and Future Capital Requirements

Our MyoCell product candidate has not received regulatory approval or generated any material revenues. We do not expect to generate any material revenues or cash from sales of our MyoCell product candidate until commercialization of MyoCell, if ever. We have generated substantial net losses and negative cash flow from operations since inception and anticipate incurring significant net losses and negative cash flows from operations for the foreseeable future. Historically, we have relied on proceeds from the sale of our common stock and our incurrence of debt to provide the funds necessary to conduct our research and development activities and to meet our other cash needs.

At June 30, 2012 we had cash and cash equivalents totaling $35,175 however, our working capital deficit as of such date was approximately $12.6 million. Our independent registered public accounting firm has issued its report dated April 12, 2012 in connection with the audit of our consolidated financial statements as of December 31, 2011 that included an explanatory paragraph describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required under Regulation S-K for “smaller reporting companies.”

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and Chief Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our CEO and Principal Financial and Accounting Officer, an evaluation was performed on the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on that evaluation, our management, including our CEO and Principal Financial and Accounting Officer, concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report due to the Company’s limited resources and limited number of employees. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and outsourced accounting professionals. As we grow, we expect to increase our number of employees, which, we believe, will enable us to implement adequate segregation of duties within the internal control framework.

Changes In Internal Control Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Our company is not involved in any material litigation and we are unaware of any threatened material litigation. However, the biotechnology and medical device industries have been characterized by extensive litigation regarding patents and other intellectual property rights. In addition, from time to time, we may become involved in litigation relating to claims arising from the ordinary course of our business.

Item 1A. Risk Factors

Not required under Regulation S-K for “smaller reporting companies.”

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Subscription Agreements – Common Stock and Warrants

In January 2012, the Company sold an aggregate of 5,750,000 shares of the Company’s common stock and warrants to purchase 5,750,000 shares of the Company’s common stock for aggregate gross cash proceeds of $117,500. The warrants are (i) exercisable solely for cash at an exercise prices of $0.02 to $0.03 per share, (ii) non-transferable for six months following issuance and (iii) exercisable, in whole or in part, at any time during the period commencing on the date that is six months and one day following the date of issuance and ending on the third year anniversary of the date of issuance.

In February 2012, the Company sold an aggregate of 3,571,430 shares of the Company’s common stock and warrants to purchase 3,571,430 shares of the Company’s common stock for aggregate gross cash proceeds of $50,000. The warrants are (i) exercisable solely for cash at an exercise price of $0.014 per share, (ii) non-transferable for six months following issuance and (iii) exercisable, in whole or in part, at any time during the period commencing on the date that is six months and one day following the date of issuance and ending on the third year anniversary of the date of issuance.

In April 2012, the Company sold an aggregate of 3,216,667 shares of the Company’s common stock and warrants to purchase 2,933,334 shares of the Company’s common stock for aggregate gross cash proceeds of $98,300. The warrants are (i) exercisable solely for cash at an exercise price of $0.03 per share, (ii) non-transferable for six months following issuance and (iii) exercisable, in whole or in part, at any time during the period commencing on the date that is six months and one day following the date of issuance and ending on the third year anniversary of the date of issuance.

In May 2012, the Company sold an aggregate of 4,114,286 shares of the Company’s common stock and warrants to purchase 3,899,999 shares of the Company’s common stock for aggregate gross cash proceeds of $90,000. The warrants are (i) exercisable solely for cash at an exercise price from $0.02 to $0.03 per share, (ii) non-transferable for six months following issuance and (iii) exercisable, in whole or in part, at any time during the period commencing on the date that is six months and one day following the date of issuance and ending on the third year anniversary of the date of issuance.

In June 2012, the Company sold an aggregate of 3,650,000 shares of the Company’s common stock and warrants to purchase 3,075,000 shares of the Company’s common stock for aggregate gross cash proceeds of $73,000. The warrants are (i) exercisable solely for cash at an exercise price of $0.02 per share, (ii) non-transferable for six months following issuance and (iii) exercisable, in whole or in part, at any time during the period commencing on the date that is six months and one day following the date of issuance and ending on the third year anniversary of the date of issuance.

The offer and sale of such shares of our common stock and warrants were effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933 (the “Securities Act”) and in Section 4(2) of the Securities Act, based on the following: (a) the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

Loan agreement amendment

On January 3, 2012, BlueCrest agreed with the Company and Greystone Capital (“Greystone”) to again split the note evidencing the Loan into two notes aggregating the outstanding principal balance, with the new note being in the principal amount of $139,728.82, the amount of the monthly payment due on the BlueCrest loan (the “New Note”). The New Note was assigned to Greystone in consideration for a payment by them to BlueCrest of $139,728.82, and thereafter exchanged for a new Convertible Note.

The loan evidenced by the New Note is in the nature of convertible debt evidenced by an unsecured convertible promissory note, bearing interest at the rate of 8% per annum, payable at maturity and convertible into common stock of the Company at a price that is 65% less than the average of the closing prices for the Company’s shares for the ten (10) days prior to the Lenders’ election to exercise its conversion right.

For the six months ended June 30, 2012 the Company paid $263,560 in principal and $11,641 in interest. As of June 30, 2012 the balance due under the Loan is $544,267.

Item 3. Defaults Upon Senior Securities

There were no defaults upon senior securities during the period ended June 30, 2012.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

There is no information with respect to which information is not otherwise called for by this form.

Item 6.

Exhibits


Exhibit No.		Exhibit Description

3.1(6)		Amended and Restated Articles of Incorporation of the registrant, as amended
3.2(9)		Articles of Amendment to the Articles of Incorporation of the registrant
3.3(8)		Amended and Restated Bylaws
4.1(5)		Loan and Security Agreement, dated as of May 31, 2007 by and between BlueCrest Capital Finance, L.P. and the registrant
4.2(12)		Notice of Event of Default, from BlueCrest Venture Finance Master Fund Limited to the Company, dated January 28, 2009
4.3(12)		Notice of Acceleration, from BlueCrest Venture Finance Master Fund Limited to the Company, dated February 2, 2009
4.4(13)		Amendment to Loan and Security Agreement, between the Company and BlueCrest Venture Finance Master Fund Limited, dated as of April 2, 2009
4.5(13)		Grant of Security Interest (Patents), between the Company and BlueCrest Venture Finance Master Fund Limited, dated as of April 2, 2009
4.6(13)		Security Agreement (Intellectual Property), between the Company and BlueCrest Venture Finance Master Fund Limited, dated as of April 2, 2009
4.7(13)		Subordination Agreement, by Hunton & Williams, LLP in favor of BlueCrest Venture Finance Master Fund Limited, entered into and effective April 2, 2009
4.8(13)		Amended and Restated Promissory Note, dated April 2, 2009, by the Company to BlueCrest Venture Finance Master Fund Limited
4.9(13)		Warrant to purchase 1,315,542 shares of the registrant’s common stock, dated April 2, 2009, issued to BlueCrest Venture Finance Master Fund Limited
4.10(14)		Warrant to purchase 451,043 shares of the registrant’s common stock, dated April 2, 2009, issued to Rogers Telecommunications Limited
4.11(14)		Warrant to purchase 173,638 shares of the registrant’s common stock, dated April 2, 2009, issued to Hunton & Williams, LLP
4.12(4)		Warrant to purchase shares of the registrant's common stock issued to Howard J. Leonhardt and Brenda Leonhardt
4.12(19)		10% Convertible Promissory Note Due July 23, 2010, in the amount of $20,000, payable to Dana Smith
4.13(19)		10% Convertible Promissory Note Due July 23, 2010, in the amount of $100,000, payable to Bruce Meyers
4.14(19)		Registration Rights Agreement, dated July 23, 2009
4.15(4)		Warrant to purchase shares of the registrant's common stock issued to the R&A Spencer Family Limited Partnership

4.15(19)			Subordination Agreement, dated July 23, 2009
4.16(19)			Note Purchase Agreement, dated July 23, 2009
4.17(19)			Closing Confirmation of Conversion Election, dated July 23, 2009
4.20(6)			Warrant to purchase shares of the registrant's common stock issued to Samuel S. Ahn, M.D.
4.23(7)			Warrant to purchase shares of the registrant's common stock issued to Howard and Brenda Leonhardt
4.27(11)			Form of Warrant Agreement for October 2008 Private Placement
4.30(19)			10% Convertible Promissory Note Due July 23, 2010, in the amount of $100,000, payable to Bruce Meyers
10.1**(1)			1999 Officers and Employees Stock Option Plan
10.2**(1)			1999 Directors and Consultants Stock Option Plan
10.3(1)			Form of Option Agreement under 1999 Officers and Employees Stock Option Plan
10.4(3)			Form of Option Agreement under 1999 Directors and Consultants Stock Option Plan
10.5**(4)			Employment Letter Agreement between the registrant and Scott Bromley, dated August 24, 2006.
10.6(1)			Lease Agreement between the registrant and Sawgrass Business Plaza, LLC, as amended, dated November 14, 2006.
10.7(1)			Asset Purchase Agreement between the registrant and Advanced Cardiovascular Systems, Inc., dated June 24, 2003.
10.8(4)			Conditionally Exclusive License Agreement between the registrant, Dr. Peter Law and Cell Transplants International, LLC, dated February 7, 2000, as amended.
10.9(4)			Loan Guarantee, Payment and Security Agreement, dated as of June 1, 2007, by and between the registrant, Howard J. Leonhardt and Brenda Leonhardt
10.10(4)			Loan Guarantee, Payment and Security Agreement, dated as of June 1, 2007, by and between the registrant and William P. Murphy Jr., M.D.
10.11(4)			Loan Agreement, dated as of June 1, 2007, by and between the registrant and Bank of America, N.A.
10.13(4)			Warrant to purchase shares of the registrant's common stock issued to Howard J. Leonhardt and Brenda Leonhardt
10.14(4)			Warrant to purchase shares of the registrant's common stock issued to William P. Murphy, Jr., M.D.
10.16(4)			Material Supply Agreement, dated May 10, 2007, by and between the registrant and Biosense Webster
10.17(5)			Warrant to purchase shares of the registrant's common stock issued to BlueCrest Capital Finance, L.P.
10.18(6)			Loan Guarantee, Payment and Security Agreement, dated as of September 12, 2007, by and between the registrant and Samuel S. Ahn, M.D.
10.19(6)			Loan Guarantee, Payment and Security Agreement, dated as of September 12, 2007, by and between the registrant and Dan Marino
10.21(6)			Loan Guarantee, Payment and Security Agreement, dated as of September 19, 2007, by and between the registrant and Jason Taylor
10.22(7)			Loan Guarantee, Payment and Security Agreement, dated as of October 10, 2007, by and between the registrant and Howard and Brenda Leonhardt
10.24(7)			Second Amendment to Loan Guarantee, Payment and Security Agreement, dated as of October 10, 2007, by and between the registrant and Howard and Brenda Leonhardt
10.25(7)			Second Amendment to Loan Guarantee, Payment and Security Agreement, dated as of October 10, 2007, by and between the registrant and William P. Murphy, Jr., M.D.
10.26**(10)			Bioheart, Inc. Omnibus Equity Compensation Plan
10.28(11)			Form of Registration Rights Agreement for October 2008 Private Placement
10.29(19)			10% Convertible Promissory Note Due July 23, 2010, in the amount of $20,000, payable to Dana Smith
10.31(19)			Registration Rights Agreement, dated July 23, 2009
10.32(19)			Subordination Agreement, dated July 23, 2009
10.33(19)			Note Purchase Agreement, dated July 23, 2009
10.34(19)			Closing Confirmation of Conversion Election, dated July 23, 2009

10.35**(20)		Amended and Restated 1999 Directors and Consultants Stock Option Plan
10.36(21)		Preliminary Commitment Letter with Seaside National Bank and Trust, dated September 30, 2010.
10.37(22)		Loan Agreement with Seaside National Bank and Trust, dated October 25, 2010.
10.38(22)		Promissory Note with Seaside National Bank and Trust, dated October 25, 2010.
10.39(22)		Amended and Restated Loan and Security Agreement with BlueCrest Venture Finance Master Fund Limited, dated October 25, 2010.
10.40(23)		Form of Subscription Agreement, executed November 30, 2010.
10.41(23)		Form of Common Stock Purchase Warrant, issued November 30, 2010.
10.42(23)		Form of Registration Rights Agreement, dated November 30, 2010.
10.43(24)		Unsecured Convertible Promissory Note for $25,000, with Magna Group, LLC, dated January 3, 2011.
10.44(24)		Promissory Note for $139,728.82 with Magna Group, LLC, dated January 3, 2011.
10.45(24)		Securities Purchase Agreement with Magna Group, LLC, dated January 3, 2011.
10.46(24)		Subordination Agreement, dated January 3, 2011.
10.47(24)		Notice of Conversion Election, dated January 3, 2011.
10.48(25)		Unsecured Convertible Promissory Note for $34,750, with Magna Group, LLC, dated May 16, 2011.
10.49(25)		Promissory Note for $139,728.82 with Magna Group, LLC, dated May 16, 2011.
10.50(25)		Securities Purchase Agreement with Magna Group, LLC, dated May 16, 2011.
10.51(25)		Subordination Agreement, dated May 16, 2011.
10.52(26)		Promissory Note for $139,728.82 with Lotus Funding Group, LLC, dated June 15, 2011.
10.53(26)		Partial Assignment and Modification Agreement, dated June 15, 2011.
10.54(26)		Subordination Agreement, dated June 15, 2011.
10.55(27)		Promissory Note for $140,380.21 with Greystone Capital Partners, dated July 8, 2011.
10.56(27)		Partial Assignment and Modification Agreement, dated July 8, 2011.
10.57(27)		Subordination Agreement, dated July 8, 2011.
10.58(28)		Promissory Note for $139,728.82 with Greystone Capital Partners, dated August 1, 2011.
10.59(28)		Partial Assignment and Modification Agreement, dated August 1, 2011.
10.60(28)		Subordination Agreement, dated August 1, 2011.
10.61(29)		Promissory Note for $139,728.82 with Greystone Capital Partners, dated September 1, 2011.
10.62(29)		Partial Assignment and Modification Agreement, dated September 1, 2011.
10.63(29)		Subordination Agreement, dated September 1, 2011.
10.64(30)		Promissory Note for $139,728.82 with Greystone Capital Partners, dated October 1, 2011.
10.65(30)		Partial Assignment and Modification Agreement, dated October 1, 2011.
10.66(30)		Subordination Agreement, dated October 1, 2011.
10.67(29)		Right of First Refusal with Greystone Capital Partners dated September 28, 2011
10.68(29)		Promissory Note for $35,000 with Thalia Woods Management, Inc. dated September 28, 2011.
10.69(29)		Subordination Agreement, dated September 28, 2011
10.70(31)		Promissory Note for $139,728.82 with Greystone Capital Partners, dated November 1, 2011.
10.71(31)		Partial Assignment and Modification Agreement, dated November 1, 2011.
10.72(31)		Subordination Agreement, dated November 1, 2011.
10.73(32)		Promissory Note for $139,728.82 with Greystone Capital Partners, dated December 1, 2011
10.74(32)		Form of Partial Assignment and Modification Agreement.

10.75(32)		Form of Subordination Agreement.
10.76(31)		Standby Equity Distribution Agreement dated as of November 2, 2011.
10.74(33)		Promissory Note for $139,728.82 with Greystone Capital Partners, dated January 3, 2012
10.75(34)		Promissory Note for $139,728.82 with Mr. Charles Hart and Mr. Greg Knutson dated February 6, 2012.
10.76(36)		Unsecured Convertible Promissory Note for $63,000, with Asher Enterprises, Inc., dated April 2, 2012

14.1(2)		Code of Ethics for Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and persons performing similar functions
14.2(2)		Code of Business Conduct and Ethics

31.1*		Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith

** Indicates management contract or compensatory plan.


(1)		Incorporated by reference to the Company’s Form S-1 filed with the Securities and Exchange Commission (the “SEC”) on February 13, 2007.
(2)		Incorporated by reference to Amendment No. 1 to the Company’s Form S-1 filed with the SEC on June 5, 2007.
(3)		Incorporated by reference to Amendment No. 2 to the Company’s Form S-1 filed with the SEC on July 12, 2007.
(4)		Incorporated by reference to Amendment No. 3 to the Company’s Form S-1 filed with the SEC on August 9, 2007.
(5)		Incorporated by reference to Amendment No. 4 to the Company’s Form S-1 filed with the SEC on September 6, 2007.
(6)		Incorporated by reference to Amendment No. 5 to the Company’s Form S-1 filed with the SEC on October 1, 2007.
(7)		Incorporated by reference to Post-effective Amendment No. 1 to the Company’s Form S-1 filed with the SEC on October 11, 2007.
(8)		Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on July 3, 2008.
(9)		Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 8, 2008.
(10)		Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2008.
(11)		Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2008.
13)		Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 8, 2009.
(14)		Incorporated by reference to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2009.
(15)		Incorporated by reference to the Company’s Annual Report on Form 10-K/A filed with the SEC on April 30, 2009.
(16)		Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 18, 2009.

(17)		Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 20, 2009.
(18)		Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on July 9, 2009.
(19)		Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 3, 2009.
(20)		Incorporated by reference to Exhibit 4.6 to the Company’s Post Effective Amendment to Registration Statement on Form S-8/A, filed with the SEC on June 2, 2010.
(21)		Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 6, 2010.
(22)		Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on October 29, 2010.
(23)		Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 6, 2010.
(24)		Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 12, 2011.
(25)		Incorporated by reference to the Company Current Report on Form 8-K filed with the SEC on May 25, 2011
(26)		Incorporated by reference to the Company Current Report on Form 8-K filed with the SEC on June 21,2011
(27)		Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 15. 2011
(28)		Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2011
(29)		Incorporated by reference to the Company Current Report on Form 8-K filed with the SEC on January 13, 2012
(30)		Incorporated by reference to the Company Current Report on Form 8-K filed with the SEC on January 30, 2012
(31)		Incorporated by reference to the Company Current Report on Form 8-K filed with the SEC on March 23, 2012
(32)		Incorporated by reference to the Company Current Report on Form 8-K filed with the SEC on March 30, 2012
(33)		Incorporated by reference to the Company Current Report on Form 8-K filed with the SEC on April 2, 2012
(34)		Incorporated by reference to the Company’s Annual Report on Form 10-K filed with the SEC on April 12, 2012.
(35)		Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filer with the SEC on May 14, 2012
(36)		Incorporated by reference to the Company’s Current Report on Form 8-K with the SEC on June 26, 2012
(37)		Incorporated by reference to the Company’s Current Report on Form 8-K with the SEC on August 1, 2012

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




		Bioheart, Inc.

Date: August, XX, 2012	By:	/s/Mike Tomas
		Mike Tomas
		Chief Executive Officer & President and Principal Fianancial and Accounting Officer